US Markets tumbled more than 1% from their record levels on a possible risk off sentiment before staging a small comeback. Weekly jobless claims rose marginally by 2k to 373k vs. the 350k estimate for the prior week. S&P was down 0.9% and Nasdaq was down 0.7%. Sectors across witnessed a sea of red with Financials, Industrials and Materials, down 2%, 1.4% and 1.3%, were the worst hit and were closely followed by Communications and IT down ~1%. US 10Y Treasury yields dipped to 1.25 before recovering to end flat at 1.32%. In Europe, ECB approved a new monetary policy strategy in which it set a symmetric 2% inflation target over the medium term (details below). European indices dropped across – CAC closed lower by 2% and DAX and FTSE were down 1.7%. US IG and HY CDS spreads widened 1.1bp and 7bp respectively. EU main and crossover CDS widened 1.3bp and 6.9bp respectively. Saudi TASI and Abu Dhabi’s ADX were down 1.2% and 0.1% respectively. Brazil’s CPI MoM was reported at 0.53% against a forecasted 0.59% and vs 0.83% last month. Bovespa was down 1.3%. Asian markets were mixed – Nikkei was sharply down 2.5% as Japan declared its fourth state of emergency and banned spectators from most Olympics events. Shanghai was down 1% and HSI is up 0.6%Singapore’s STI was pleasantly up 0.2%. Asia ex-Japan CDS spreads were 2.1bp wider.
New Bond Issues
Weifang Binhai Investment 363-day $ notes at 5.7% area
Beijing Capital Development Holding raised $517mn via a 5Y bond at a yield of 3.445%, 30bp inside initial guidance of T+300bp area. The bonds have expected ratings of BBB and received orders over $1.9bn, 3.7x issue size. Proceeds will be used for debt repayment.
Eastern Air Overseas raised S$500mn via a 5Y SBLC-backed note bond at a yield of 2%, 40bp inside initial guidance of 2.4% area. The bonds have expected ratings of A1 and received orders over $1.2bn, 2.4x issue size. The bonds are backed by a letter of credit from ICBC Shanghai Municipal Branch, rated A1/A. There is a change of control (CoC) put at 101 if the SASAC ceases to directly or indirectly control Eastern Air Overseas, or if the issuer consolidates or merges, sells or transfers all or a substantial portion of its assets to a non-SASAC entity.
Mitsubishi raised $500mn via a 5Y bond at a yield of 1.237%, 25bp inside initial guidance of T+75bp area. The bonds have expected ratings of A2/A. Proceeds will be used for general corporate purposes.
New Bonds Pipeline
- Minor International hires for $ PerpNC5 with Bangkok Bank guarantee
- KT Corp hires for $ bond with expected 5.5Y tenor
- Moody’s upgrades Tianqi Lithium to Caa1; outlook remains negative
- Fitch Downgrades Tunisia to ‘B-‘; Outlook Negative
- Jaguar Land Rover Automotive Outlook Revised To Stable On Strong Cost Control; ‘B’ Ratings Affirmed
- Outlooks On Three Australian Retail REITs Revised To Stable From Negative; Ratings On Eight Affirmed
- Fitch Affirms and Withdraws Ratings on Empresa Electrica Angamos SpA